The debate began when the Reverend Philip Wicksteed published a criticism in October 1884 of the Marxist explanation of value, using Marginal Utility Theory. Shaw responded, but, a better clown than a Marxist, got soundly drubbed by Wicksteed’s Rejoinder. Shaw was already migrating away from Marxism and “the upshot was that I put myself into Mr. Wicksteed’s hands and became a convinced Jevonian”. Thenceforth, a series of skirmishes took place between the Fabians and the British Marxists (mainly Hyndman).

I’m not going to rehearse the entire debate – you can do that yourself – but the significance this debate has today includes:

The recognition that the issue of value is central to Marxism. Without it, it crumbles. As a contributor to the Leipzig Literarischen Centralblatt of July 4 1868 remarked: “Rejecting the theory of value is the only task facing anyone who opposes Marx; for if one concedes this axiom, then one must grant Marx nearly all the conclusions based on it, which he reaches by applying the strictest logic.” Marx ‘My Plagiarism of Bastiat‘ Collected Works, 20, p216.

The debate made all the main points which have been repeated ever since (except for the ‘Transformation Problem’) in a condensed form. It therefore serves as a economical exercise to test one’s understanding of the law of value.

It demonstrates the political importance of what might seem abstract economic debates.